UD Ministry Proposes to Increase User Charges


  • UD Ministry proposes to increase user charges such that it cover operation and maintenance charges of smart cities.
  • Basing on resource requirement for Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT), the Ministry suggested the idea at a recent regional workshop on Smart Cities.
  • During the workshop the UD Ministry has pointed out that user charges were way below cost recovery in urban areas citing low parking rates as example.
  • It also pointed out the huge gap between the cost of providing urban services and cost recovery
  • The Ministry is developing a Model Concession Agreement which includes risk allocation between public and private sectors, performance standards and coverage targets besides providing for flexibility to urban local bodies.
  • The UD Ministry has informed the states that the government is pursuing a loan of USD 1 billion from Asian Development Bank and another USD 500 million from the World Bank to provide funds to the Special Purpose Vehicles to be created for each smart city

Source: ET

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